Business owners wait on cannabis board appointments

Marijuana plants grow under lights at Cresco Labs medical marijuana cultivation facility Aug. 8, 2018, in Joliet, Ill. Erin Hooley/Chicago Tribune/TNS

ALBANY — Officials continue to review potential appointees to the state’s Office of Cannabis Management and Cannabis Control Board — the entities to license and regulate the state’s new market for adult-use recreational marijuana — as New Yorkers wait on more specifics to enter the business.

The board will make critical market decisions, such as the number of licenses to grant to cultivators, processors, distributors, dispensaries and others, the application process and acceptance periods.

The Marijuana Regulation and Taxation Act, which Gov. Andrew Cuomo signed into law March 31, legalized recreational marijuana use for adults 21 years of age and older and immediately expunged marijuana-related convictions from New Yorkers’ records. The law established the Office of Cannabis Management, the Cannabis Control Board and Cannabis Advisory Board to regulate the industry.

The control board will consist of five members with three appointed by the governor, including the chair, and one appointment by each of house of the state Legislature. The advisory board will have 13 voting members with seven appointed by the governor and two from each legislative chamber.

Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, on Tuesday said leaders are reviewing candidates, but not close to making a decision for appointments.

“We’re not nearing it, but we certainly are (focusing) on it,” she said. “It’s on my agenda, but I won’t say I’m nearing it, no.”

Appointments are expected to be made by the summer, Stewart-Cousins said.

The advisory board will make recommendations to the control board, and will administer and govern the distribution of social equity and community reinvestment grants.

Members of the board will also approve the social and economic equity plan, final decisions of any appeals and promulgate industry rules and regulations.

At least 50% of licenses will be issued to social equity applicants involved in the adult-use program. The social and economic equity plan will outline the criteria to prioritize certain applicants, including women-owned businesses, businesses owned by minorities or people of color, service-disabled veterans and small farm operators in financial hardship or farms operated by someone in an underrepresented demographic.

“Social equity is an access to opportunity, and to achieve that, it’s imperative you have a smart market design,” said Chris Alexander, government relations and policy manager at Viola and former associate counsel in the state Senate.

Alexander was one of several panelists to participate in a three-hour state Bar Association forum Tuesday dissecting the details of the MRTA.

“The fact New York has an incredibly limited program currently, it does wonders to make sure we can implement a strong equity process,” he added. “Because of space, it’s central to making sure there are multiple access points and for the market not to be documented by major players.”

Applicants who make 80% or less of their county’s median income, impacted by the war on drugs who have, or a close relative has, a marijuana-related conviction, will be given additional priority for licensure.

The advisory boards under the office will prioritize at least half of license applicants to social equity applicants involved in the adult-use program. Potential licenses include cultivator, processor, distributor, dispensary, delivery and micro-business in addition to on-site consumption to sell marijuana products, cooperative licenses for groups to cultivate, grow and process cannabis and licenses for nurseries to sell seedling marijuana plants before they flower.

A chief equity officer will task the implementation of the social and economic equity plan to ensure the revenue and legalization is reinvested in communities most disproportionately affected by past drug policies, including minority communities of color.

“The flexibility of the fund is really significant,” Lynelle Bosworth, a shareholder with international firm Greenberg Traurig said Tuesday.

Stewart-Cousins previously discussed, Bosworth said, how the money could help a variety of households, such as grandparents formerly incarcerated for marijuana offenses who now take care of their grandchildren.

“Grandparents have been incarcerated,” she added. “The fund will find a number of opportunities to really provide assistance to communities who need it most.”

High capital requirements and felony bars on licensure were removed to ensure fair opportunity for entry, said Jennifer Richardson, president of Capital District Black & Hispanic Bar Association.

The state law also creates an incubator program through the state Urban Development Corporation to offer counseling services, education and financial planning to future cannabis business owners.

“You may never have created a business plan in your life — ‘How do I learn to do that?’” Richardson said. “To have a place to go to figure these things out, to get counseling, even just how to walk yourself through a license process — this is really innovative and will really play a key piece.”

The corporation will grant low- and no-interest loans to help small businesses cover start-up costs.

New York was the 15th state to legalize recreational marijuana, but is the first to implement a program to foster small businesses and industry growth in disproportionately afflicted communities.

Recreational marijuana sales will begin after April 1, 2022. Dispensaries and retailers are expected to open in the state within the next 18 months.

The Office of Cannabis Management is an independent office within the State Liquor Authority. Cannabis and alcohol cannot be sold and consumed in the same facility.

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